CATEGORY - SME

IMPS - Benefits, Transactions Limits, Charges and How it Works

SME - 14 Mar, 2024

Table of Contents

Before 2010, transferring funds between banks in real time was a business hurdle. Existing options like NEFT and RTGS were limited to banking hours. Recognizing this need, the National Payments Corporation of India (NPCI) launched the Immediate Payment Service (IMPS) in November 2010.

IMPS revolutionized interbank transfers by offering 24/7 availability through various convenient channels: mobile banking, internet banking, ATMs, branches, and even SMS. This empowers businesses to receive and send funds instantly, streamlining cash flow and enhancing customer experiences.

Participating in IMPS is straightforward. Banks and authorized Prepaid Payment Instrument (PPI) issuers with valid licenses from the Reserve Bank of India (RBI) can join the network. With over 871 active members, IMPS offers a secure, cost-effective solution for real-time interbank transactions.

What is IMPS?

IMPS, or Immediate Payment Service, is a real-time interbank electronic funds transfer system developed by the National Payments Corporation of India (NPCI). It allows businesses to receive and send money instantly, 24/7, through various channels like mobile banking, internet banking, ATMs, and even SMS.

Benefits and Features of IMPS

Faster Transactions: Unlike traditional methods, IMPS facilitates instant fund transfers, eliminating delays and streamlining your cash flow. This mainly benefits businesses that rely on quick settlements, such as e-commerce or delivery services.
24/7 Availability: Unlike traditional banking hours, IMPS operates 24/7, 365 days a year. This allows for greater flexibility in managing your finances, enabling you to make or receive payments anytime, anywhere.
Multiple Payment Channels: IMPS offers businesses various convenient ways to initiate transactions. You can use mobile banking apps, internet banking platforms, ATMs, or even SMS services, depending on your needs and preferences.
Versatility in Transfers: IMPS caters to person-to-person (P2P) and person-to-account (P2A) transactions. You can transfer funds to individuals using their mobile numbers (P2P) or directly deposit funds into their bank accounts (P2A) without requiring their mobile numbers.
Enhanced Security: IMPS prioritizes security by employing two-factor authentication (2FA). This ensures that only authorized individuals can initiate and approve transfers, minimizing the risk of fraud.
Higher Transaction Limits: IMPS allows for transfers of up to ₹5 lakh per transaction, offering greater flexibility for managing larger payments. While there are no minimum transfer limits, nominal charges may apply depending on your bank and the transaction amount.
International Remittance Option: For businesses with international operations, IMPS can facilitate receiving payments from overseas. Partnering with a money transfer service provider connected with an Indian bank offering IMPS transfers allows you to accept international payments quickly and efficiently.

By leveraging the benefits of IMPS, businesses can optimize their payment processes, improve cash flow management, and enhance overall financial efficiency.

How Does IMPS Work?

There are two primary methods for sending money through IMPS:

P2P Transfers (Person-to-Person):

This method requires both the sender and receiver to have their mobile numbers registered with their banks and possess a unique Mobile Money Identifier (MMID).
To send money, businesses can log in to their mobile banking app or Internet banking portal and select the IMPS P2P transfer option.
They must then enter the recipient’s mobile number, MMID, and the desired transfer amount.
Finally, the transaction is authenticated using a two-factor method like a mobile PIN.

P2A Transfers (Person-to-Account):

Unlike P2P, P2A transfers don’t require the recipient to be registered for mobile banking.
Businesses can initiate this transfer by providing the beneficiary’s bank account number and IFSC code (Indian Financial System Code) through their online banking portal.
Once the beneficiary is saved, subsequent transfers become easier.
Like P2P, businesses enter the transfer amount and authenticate the transaction using their Internet banking credentials.

Additional Transfer Methods:

ATMs: Some ATMs allow fund transfers using IMPS. Businesses can use their debit cards, enter the recipient’s details (mobile number, MMID, account number, and IFSC), and authenticate the transaction with their ATM PIN.
SMS Banking (limited availability): Certain banks offer IMPS transfers via SMS. Businesses must register for mobile banking and follow the specific SMS formats their bank provides to initiate and authenticate the transaction.

Important Points to Remember:

All IMPS transactions require two-factor authentication for security.
Transfer limits may vary depending on the chosen channel and bank policies.
Businesses sending money through ATMs or Internet banking can be registered for something other than IMPS mobile banking.
Similarly, recipients using P2A transfers with account numbers and IFSC codes don’t require mobile banking registration.

By understanding the different methods and considerations for IMPS, businesses can leverage this service for faster and more efficient financial transactions.

Understanding IMPS Limits and Charges for Businesses

IMPS (Immediate Payment Service) is a convenient tool for businesses to transfer funds instantly to beneficiaries. However, it’s essential to understand the transaction limits and associated charges set by the National Payments Corporation of India (NPCI) and individual banks.

IMPS Transaction Limits:

The NPCI has set a nationwide maximum limit of ₹5 lakh per transaction for all channels except SMS and Interactive Voice Response (IVR). This means a single transaction cannot exceed this amount.
It’s crucial to note that individual banks can set their limits, often lower than the NPCI limit. Here’s an example:
1. HDFC Bank:
2. Account Number: Maximum transaction limit of ₹5 lakh applies. However, additional daily limits may be based on third-party transfer (TPT) restrictions.
3. MMID (Mobile Money Identifier): NetBanking and Mobile Banking transactions using MMID have a daily limit of ₹5,000 per customer ID on either channel, not combined.
Businesses should always check their bank’s specific IMPS limits to avoid transaction rejections. This information is typically available on the bank’s website or through customer service channels.

IMPS Charges:

Charges for IMPS transfers are generally levied by the sending bank, not the receiving bank. However, some banks may waive charges for specific customers or account types.
Businesses should compare IMPS charges offered by different banks to find the most cost-effective option for their transaction volume.

Top Indian Banks IMPS Transfer Limit

Bank	Daily IMPS Limit	Reference
State Bank of India (SBI)	Rs. 5 lakh	[Can be found on the SBI website or RBI website]
HDFC Bank	Rs. 5 lakh	https://www.hdfcbank.com/personal/pay/money-transfer/immediate-payment-service-imps/limits
ICICI Bank	Rs. 5 lakh	[RBI website or bank’s official communication]
Axis Bank	Rs. 5 lakh	[RBI website or bank’s official communication]
Punjab National Bank (PNB)	Rs. 5 lakh	[RBI website or bank’s official communication]
Bank of Maharashtra	Rs. 5 lakh	[RBI website or bank’s official communication]
Yes Bank	Rs. 5 lakh	[RBI website or bank’s official communication]
Canara Bank	Rs. 5 lakh	[RBI website or bank’s official communication]
Kotak Mahindra Bank	Rs. 5 lakh	[RBI website or bank’s official communication]
UCO Bank	Rs. 5 lakh	[RBI website or bank’s official communication]
Bank of Baroda	Rs. 5 lakh	[RBI website or bank’s official communication]

We recommend following up with your bank for any details or recent IMPS limit changes.

IMPS Limit Per Day

Businesses can leverage Immediate Payment Service (IMPS) for swift and secure daily fund transfers up to ₹5 lakh. This increased limit, established by the Reserve Bank of India (RBI), facilitates efficient cash flow management and streamlines business operations.

IMPS Transfer Time

IMPS (Immediate Payment Service) offers businesses real-time money transfers. Funds typically reach the beneficiary’s account immediately after your bank approves the transaction. However, resolution may take up to 5 business days for rare technical issues.

Key players involved in IMPS transactions

The Immediate Payment Service (IMPS) offers businesses a convenient way to send and receive funds instantly. It involves three key players:

Your Business: As the sender (remitter), your bank or mobile wallet facilitates the transfer.
Recipient: The beneficiary can be another business or individual with a registered mobile number and bank account.
NPCI: The National Payments Corporation of India is the central switch, ensuring secure and real-time settlements.

For seamless transactions, ensure your beneficiaries are registered for mobile banking and have their MMID (Mobile Money Identifier).

How to register for IMPS service?

IMPS (Immediate Payment Service) facilitates real-time interbank fund transfers. Businesses can leverage IMPS for:

Faster settlements: Receive payments instantly, improving cash flow.
Simplified collections: Offer convenient payment options to customers.

To activate IMPS:

Enroll in your bank’s mobile banking service.
Obtain your Mobile Money Identifier (MMID) and MPIN.
Utilize the bank’s mobile app or SMS service (if available) for IMPS transactions.

Note: Both sender and recipient require IMPS registration for successful transfers.

What are the steps to transfer money via IMPS?

IMPS (Immediate Payment Service) offers businesses a fast and convenient way to transfer funds in India. Here’s how it works:

Log in and select IMPS: Access your bank’s mobile app or website and choose IMPS from the transfer options.
Fill Beneficiary Details: Enter the recipient’s mobile number and MMID (Mobile Money Identifier) for a swift transfer. Alternatively, use their bank account number and IFSC code for more traditional transfers.
Specify Amount & Confirm: Enter the transfer amount, double-check all details, and verify with your MPIN or OTP.
Instant Transfer: Upon confirmation, the funds are transferred immediately to the beneficiary’s account.

In Conclusion:

IMPS money transfer mode is a valuable channel for businesses requiring immediate and secure fund transfers. However, knowing transaction limits and associated charges set by NPCI and individual banks is essential. By understanding these factors, businesses can leverage IMPS effectively to optimize their financial operations.